You have read the headlines time and time again. “athletes make too much money”, “those guys are overpaid”, but Are we asking the wrong question in relation to the NFL and NBA. These are two industries where Black professionals make at the very least on average over $1 million annually. There are 32 NFL teams with 53 roster spots each, which means 1,696 NFL players and there are 30 NBA teams with 15 roster spots each, totaling 450 NBA players at any given moment. According to Forbes on average, NBA players make $5.15 million and NFL players make $1.9 million per year Blacks make up at least 80 percent or 1187 NFL Millionaires and 80 percent or 315 NBA Millionaires annually.
Professional Sports a Cash Cow
The explosion of television and marketing dollars flowing to professional sports teams is pumping players salaries to unprecedented heights and has ushered in a gold rush of capital, fame, and influence in the age of social media where a LeBron James Tweet is worth hundreds of thousands of dollars. There has never been a more lucrative time to be in the sports agency business either as the sports industry has mushroomed to dizzying heights in players salaries, the value of endorsement packages, and management fees.
The Sports Agency Industry
The firms featured in Forbes’ ranking of the most valuable sports agencies have negotiated a collective $37.6 billion in current professional athlete contracts, netting themselves more than $1.85 billion in commissions. Sports agency is an industry where professional Black athletes have the ability to choose their sports agent these numbers should be reflective of the 70 percent of NFL players and 80 percent of NBA players they can potentially represent.
We should dominate this multi-billion dollar industry, but we don’t. This should be the question we are asking in 2018. The next question we should be asking is where are these millionaires investing their $2 billion dollars annually? According to a 2009 Sports Illustrated article, 78% of National Football League (NFL) players are either bankrupt or are under financial stress within two years of retirement and an estimated 60% of National Basketball Association players go bankrupt within five years after leaving their sport.
Charting a New Direction
The information above leads me to some questions. Should there be a concerted effort for Black athletes to employ Black sports agencies to manage their business affairs? Should Black players, agents, coaches and upper management make an organized play to exert more influence over the flow of the billions of dollars in professional sports? Sports is a multi-billion dollar industry where the hired help is overwhelmingly Black, but the fans and owners are mostly white how do we exert more pressure on the two leagues to empower our community?
With Black home ownership at a 50 year low and Black wealth heading towards zero in the near future what type of social and economic strategies can be put in place to turn the tide on these dismal statistics. I suggest that our Black athletes create impact investment funds that are managed by experienced and capable Black finance professionals. These funds would provide professional management for these professional athletes and targeted investments in building a stronger economy in Black communities through real estate development, retail, and the tech industry to name a few areas where our pooled resources can make a positive impact in our communities.
Today, some of the world’s most respected and successful figures are in the tech industry. They include the entrepreneurs who have developed innovative products and launched industry-changing companies and the venture capitalists who provide capital and assistance to help these companies thrive. But while the technology sector continues to flourish, and its luminaries are seen as role models, the industry as a whole is suffering from a lack of diversity that has undermined its ability to fully realize its transformative potential.
The Need for Black Capital Aggregation
There were thousands of venture deals minted from 2012 to 2014, so few black women founders raised money that, statistically speaking, the number might as well be zero. (The exact number is 24 out of 10,238, or just 0.2 percent.) Of those few that have raised money, the average amount of funding its $36,000. That’s compared to the typical startup, typically founded by a white male, that typically fails. These manage to raise an average of $1.3 million in venture funding.
This disparity comes even as black women today comprise the fastest-growing group of entrepreneurs in the US, with over 1.5 million businesses—a 322 percent increase since 1997. These businesses generate over $44 billion a year in revenue. Yet in the tech world, investors aren’t taking a risk on startups run by black women. I venture to say that these are the questions we should be asking about the NFL and NBA in relations to the Black political economy that operates within the United States.
Black people in the United States have made extraordinary gains in education, industry and even increasing salaries with over 8 million Black families making over $75,000 annually, but home ownership is dismal and on average we have little to no wealth when compared to our White counterparts. One way to increase our wealth both on the individual and community level is to pool our tremendous financial assets through the “Crowd Economy”. The crowd economy provides a basis for more efficient use of resources, but also reduces the strain on the environment and ecosystem services that are fast depleting. The crowd economy will allow regulation crowdfunding platforms to allow regular citizens to invest in build economic capacity at the community while running capital parallel to the diversified professionally managed community focused impact investment funds of wealthier professional athletes.